Thailand to tokenize $150M government bonds for retail investors: Report

Thailand’s Ministry of Finance reportedly plans to issue $150 million worth of digital investment tokens, allowing retail investors to buy government bonds.

The Bangkok Post reported on May 13 that Finance Minister Pichai Chunhavajira announced the initiative at a briefing after the cabinet endorsed the plan. He added that the tokens will be launched within the next two months.

The so-called “G-tokens” will be used to raise funds from the public under the current budget borrowing plan, said Patchara Anuntasilpa, director-general of the Public Debt Management Office. He added that these were not debt instruments.

“One big selling point of the token is that it allows more retail investors to become part of the digital economy,” he said, adding that for as little as $3, “they can invest in government bonds.” 

Until recently, retail investors have been limited or excluded from large investment product offerings in Thailand, which are predominantly aimed at institutional and wealthy investors.

Finance Minister Pichai said the initial token mint is designed to “test the market” and investors will earn higher returns than bank deposits, but did not specify yields.

Commercial banks in Thailand offer very low interest rates to savers, currently just 1.25% for a 12-month fixed deposit, which is much lower than rates set by its central bank, which has kept rates elevated until recently despite increasing economic woes. 

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The report noted that the asset was not a cryptocurrency. It would be tradable on licensed digital asset exchanges, which are not accessible to non-Thai citizens residing in the country.

Government bonds are debt securities issued by the state to fund public spending. When investors buy them, they are essentially lending money to the government for a specified period in exchange for regular interest payments and the return of their principal at maturity.

In February, Thailand’s securities regulator revealed plans to launch a tokenized securities trading system for institutional investors. 

The value of tokenized bonds globally has surged recently and is currently $225 million, according to real-world asset tokenization analytics platform RWA.xyz. 

The onchain value has doubled since the beginning of this year, and could be much higher since the platform only tracks a limited number of issuers, primarily in Europe.

However, the value of tokenized US treasuries has grown to $6.9 billion, up 73% this year, according to the analytics platform.

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